Managing with Ethics and

Social Responsibility
We Will

Examine the issues of managerial

ethics and corporate social
responsibility;

Define the terms....look at the ways of

thinking about ethical behavior; and

Asses the role of the organization as a

member of the broader social
community.

What is Ethical Behavior?

MORALS
Doctrine of Conduct relating to,
dealing with, or capable of making the
distinction between right and wrong in
conduct or character.

ETHICS

The system or Code of Morals of a

particular person, religion, group, or
profession.
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Being Ethical is:

Conforming to Moral Standards;
conforming to the standards of conduct
of a given group or profession.

Ethical Behavior is:

Doing what is accepted as "good" and

"right" as opposed to "bad" and "wrong"
in the context of the governing Moral
Code.
Ethical Behavior=Legal Behavior
+"something
else"
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Context of the Governing

Moral Code

Refers to the group,

organization, or broader
societal venue within which
the prevailing norms and
values underlying a governing
moral code are established.
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Laws, Values, and Ethical

Behavior
Any behavior considered Ethical
should also be legal in a just
and fair society.
However
Legal behavior is not necessarily
ethical behavior.
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Four Views of Ethical

Behavior

Utilitarian View
Where moral behavior is that
which delivers the greatest good
to the greatest number of people.

Individualism View

Where moral behavior is that

which is best for long-term selfinterest.
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Moral-Rights View
Where moral behavior is that
which respects fundamental rights
shared by all human beings.

Justice View
Where moral behavior is that
which is impartial, fair, and
equitable in treating people.
(Procedural and Distributive Justice)
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Managerial Ethics

Principles that guide the

actions and decisions of

managers, and determine if
they are good or bad, or
right or wrong.

Ethical Dilemmas
An ethical dilemma occurs when

someone must decide whether or

not to pursue a course of action
that, although offering the potential
of personal or organizational benefit
or both, may be considered
potentially unethical.

Most ethical dilemmas involve

conflicts with superiors, customers,

and subordinates.
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Most Common Unethical

Requests From the Boss

Supporting Incorrect Viewpoints

Signing False Documents
Overlooking Bosss Wrongdoing
Doing Business with Bosss
Friend

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Rationalizations for
Unethical Behavior

Convincing yourself that the behavior

is not really illegal.

Convincing yourself that the behavior

is in everyone's best interest.

Convincing yourself that nobody

will ever know what youve done.

Convincing yourself that the

organization will protect you.

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Factors Affecting Managerial

Ethics

The Manager as a Person

Family influences
Religious values
Personal standards, and needs

The Employing Organization

Policies, codes of conduct
Behavior of supervisors
Behavior of peers
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Factors Affecting Managerial

Ethics

The External Environment

Government regulations
Norms and values of society
Ethical climate of the industry

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Maintaining High Ethical

Standards

ETHICAL TRAINING
It is not about teaching people right
from wrong...we assume they know
that, and,
It is not about giving people the
moral courage to do what is
right...they should be able to do that
anyhow.

Ethical Training
is about dealing with dilemmas
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A Checklist for Making

Ethical Decisions
Recognize the ethical dilemma
Get the facts
Identify your options
Test each option
Is it legal?
beneficial?

Is it right?

Is it

Decide which option to follow

your decision by
Double-check
asking:"How will I feel if my family
finds out about my decision?
Take action

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Whistleblower
Protection
Laws vary from state to state, and
federal laws protect mainly
government workers.

Where legal protection exists

whistleblowers face a number of

barriers that can make it hard for
them to expose unethical behavior
in the workplace.
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Top Management Support

Top management set the Ethical Tone

for the

organization as a whole.

Top managers have the power to

shape an organization's policies and

set its moral tone as well.

Top managers can and should serve

as models of appropriate ethical

behavior for the entire
workforce.

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Top Management Support

Supervisors must be

careful not to unwittingly

encourage unethical
behavior by exerting too
much pressure for the
accomplishment of difficult
goals.
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Formal Code of Ethics

Written and official guidelines on how to
behave in situations prone to create
ethical dilemmas.
Areas often addressed in written codes
of ethics:

Workforce Diversity
Bribes and Kickbacks
Conflicts of Interest
Political Contributions
Customer and Supplier Relations
Misappropriation of Corporate Assets

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Corporate Social
Responsibility

An obligation of the organization

to act in ways that serve both its

own interests and the interests of
its many external publics.

These publics are considered

STAKEHOLDERS, the persons and

groups who are affected in one
way or another by the behavior of
an organization.
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Stakeholders
Employees
Stockholders
Customers
Suppliers
Competitors
Labor Unions

Financial

Institutions

Political Parties
Educational
Institutions

Courts and Legal

Institutions

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Contrasting Views on
Social Responsibility

Classical View
Holds that managements only
responsibility is running a business
to maximize profits.

Socio-Economic View
Holds that any organization must be
concerned about the broader social
welfare.
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The Classical View

Against Social
Responsibility

Reduced business profits

Higher business costs
Dilution of business purpose
Too much social power for

businesses
Lack of business accountability
to the public
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The Socio-Economic View

For Social Responsibility

Long-run profits for businesses.

Public expectations support business
social responsibility.

Better public image for businesses.

Businesses may avoid more regulation.
Businesses have the resources.
Businesses have the ethical obligation.
The public wants it.
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Evaluation of Corporate
Social Performance
There are many action domains
in which social responsibility can
be pursued by business firms and
other types of organizations.
They include:
Concerns for Ecology and
Environmental Quality.
Truth-in-Lending and Consumer
Protection
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Evaluation of Corporate
Social Performance
Aid-to-Education and Service to
Community
Employment Practices Affecting
Minorities
Progressive Labor Relations
Employee Assistance
General Corporate Philanthropy
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Criteria for Evaluating

Corporate Social
Performance

Economic Responsibility

Is fulfilled when it earns a profit

through the
provision of goods and
services desired by the public.

Legal Responsibility

Is fulfilled when an organization

operates
within the law and
according to the
requirements of
various external regulations.
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Ethical Responsibility
Is met when its actions voluntarily
conform not only to legal expectations,
but also to the broader values and
moral expectations of
society.

Discretionary Responsibility
Is met when the organization
voluntarily moves beyond basic
economic, legal, and ethical
expectations to provide leadership in
advancing the well-being of individuals,
communities, and society as a whole.
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A Continuum of Social
Responsibility Strategies

Obstruction

Fight social demands

Defensive

Do the minimum legally required

Accommodation

Do the minimum ethically required

Proactive

Take leadership in social initiatives

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Government Regulation of
Business

Health and Safety

Fair Labor Practices
Consumer Protection
Environmental Protection
FAA EPA OSHA ICC FDA EEOC
OFCCP NLRB SEC
(To name a few)
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